Chapter 08: Discharge of a Contract, and Remedies

Question 1

List Modes of Discharge?

Answer 1

By Actual Performance
By Mutual Agreement
By Impossibility 
By Breach of contract [one party willfully does 
not perform promise]

Question 2

list and explain Discharge by Mutual Agreement ?

Answer 2

1. Novation [substitute new contract in place of old contract]
2. Alteration [making material alteration in term of contract]
3. Recission [cancelling contract with mutual consent before perfrmance]
4. Remission [accepting of lesser fullfilment made of orignal promise made] (lesser debt or extending time for performance)
5. Waiver [surrenders his legal right and other party is released]
6. Promisee’s refusal/neglect [not providing facilities to promisor and is discharged]

Question 3

types of impossibility?

Answer 3

Initial Impossibility
[ existed at time of making agreement and parties don’t know about it –> void ab
initio + Damages if a party knew]

Supervening Impossibility
[it becomes impossible to perform after making contract –> void +
Restore Benefits]

Question 4

Examples OR NOT example causing Supervening Impossibility?

Answer 4

Examples causing Supervening Impossibility:

1. Destruction.
2. Death or Personal incapacity.
3. Alien enemies.
4. Change of law.
5. Non-existence or Non-occurrence of of particular state of things necessary for contract ( non-occurance of contingent things)

Examples NOT causing Supervening Impossibility:

1. Strikes, Lockdowns etc. (unless agreed)
2. Default of a Third Party.
3. Difficulty of Performance
4. Commercial Impossibility
5. Partial Impossibility of some of object of contract

Question 5

Remedies for Breach of Contract?

Answer 5

> Suit for specific performance
or Injunction
(allowed only in some cases)

> Restitution
(i.e. restoration of
benefits already received)

> Damages
(i.e. monetary
compensation of loss

Question 6

Ordinary Damages and its Rules?

Answer 6

Ordinary Damages:
Definition:
dmages to compensate loss which arise naturally in usual course from breach of contract
[e.g. good/service bought at higher price]

Rules:
  > Allowed, whether communicated or not 
in contract.
  > Actual Damage allowed [e.g. market 
price– contract price]

Question 7

Special damages and remote damages?

Answer 7

Special Damages:
Definition:
to compensate damage which Arise due to breach of contract, and parties knew
it [e.g. loss on other contracts due to breach of this
contract

Rules:
> Allowed only if communicated at time of contract.
> Actual Damage allowed.

Remote and indirect losses:
> are not allowed [e.g.
loss of future projects not yet made]

Question 8

penalty?

Answer 8

if parties fix an amount at time of making contract which will be paid on breach of contract it i called penalty
if penalty is extravagant and disproportionate to likely damages e.g, very high interest rate in case of defeault.
in such case court allow only reasonable compensation not exceeding the stated amount.